Infineon Technologies AG CEO Peter Bauer recently told reporters in Frankfurt that it is supplying power semiconductors for Tesla Motors Inc.'s electric cars. Infineon is Europe's second largest chipmaker.
Infineon spokesman Christian Hoenicke said that Tesla has used Infineon's power semiconductors in its battery-operated Roadster and is also testing them for its Model S, which will start production in 2012.
Hoenicke did not disclose the deal's financial terms. Tesla, which is based in Palo Alto, California, is backed by Daimler AG and Toyota Motor Corp.
After consenting to sell its wireless unit to Intel Corp. in August 2010, Infineon is now focusing on its industrial, auto, and energy-efficiency businesses. Infineon anticipates closing the deal in 2011's first quarter.
Tesla, which makes the $109,000 electric Roadster sports car, aims to become the auto industry's leader in battery-powered cars.
At a meeting of the International Club of Frankfurt Business Journalists, Bauer says the wireless-chip business is closely tied to the ever-changing U.S. dollar.
Holding his iPhone, which has Infineon semiconductors, Bauer said the wireless-chip business is "highly volatile" as it requires significant research and development capacity and investment.